Mark Tencaten | The benefits of using cryptocurrencies for business

A growing number of businesses all around the world are adopting cryptocurrency and other digital assets for various operational, transactional, and investment needs. Like every investment, there are uncharted hazards as well as compelling attractions. Mark Tencaten has examined the concerns and information businesses should take into account when deciding whether and how to employ digital assets.

What can cryptocurrency do for your business?

Ø  Here are some of the reasons given by Mark Tencaten for why some businesses are now embracing crypto to get your firm thinking about it:

1. Crypto may make new demographic groups accessible. Users frequently reflect a more modern, tech-savvy consumer with extra money to spend on upscale goods and services. In fact, according to a recent poll, 77% of retailers said they take cryptocurrency because of its cheaper transaction costs, and 85% of them stated they do so in order to attract new clients.

2. Introducing cryptocurrency today could encourage internal awareness of this technology in your business. Additionally, it may position the business better in this new market for a time when central bank digital currencies (CBDCs) might be used.

3. By tokenizing existing investments, a broader understanding of the cryptocurrency market and blockchain technology might open up new liquidity and investing alternatives.

4. Cryptocurrency offers several alternatives that are simply not possible with conventional money. Programmable money, for instance, can enable correct revenue sharing in real time while boosting transparency to ease back-office reconciliation.

5. More businesses are discovering that key clients and suppliers want to conduct business using cryptocurrency. Consequently, in order to ensure seamless transactions with important stakeholders, your company may need to be set up to accept and send cryptocurrency.

6. A variety of more conventional Treasury tasks can be improved via cryptocurrency, including:

·        Enabling quick, safe, and easy money transactions.

·        Assisting in enhancing control over the company's capital.

·        Managing the potential and dangers associated with making digital investments.

7. Cash, which may lose value due to inflation over time, may not be a good substitute; hence cryptocurrency may be a good balancing asset. Cryptocurrency is an investable asset, and some of it has done quite well during the previous years. Unmistakable volatility concerns do exist, and they should be carefully evaluated.

Ø  Mark Tencaten suggests that a different style of thinking than that used to decide whether to utilize cryptocurrency for investing may be necessary when deciding to use it for operations:

1. Investing in cryptocurrencies is often a longer-term strategy, and employing it in operations frequently necessitates even more careful decision-making.

2. Utilizing cryptocurrencies in day-to-day activities may encourage the creation of new, creative forms of trade. Along with that, the company's market reach might be expanded to include new counterparties as well as consumers.

3. Companies employing cryptocurrencies must manage crucial onboarding difficulties, including accounting, regulatory, and tax problems for which there is now limited regulatory guidance.

Conclusion

Implementing the usage of cryptocurrencies and digital assets in general—in all of its forms and configurations—represents a considerable investment. It's a lot more critical choice than switching to a new payment method. The company's approach to managing operational complexity and key strategic issues must be thoroughly revised in light of using crypto.

The good news is that a corporation may gradually incorporate cryptocurrency into its operations. When the business is ready to go forward, it's critical that both internal and external participants start putting in the time and effort needed to succeed. The risk, finance, treasury, accounting, tax, technology, operations, communications, and legal departments should all participate, as well as the board and its committees.

New department-wide procedures and controls will probably be needed as a result of adoption. Players both within and outside of the firm must adapt their thinking and become at ease with new realities while participating in crypto activities. Strong C-suite leadership is essential to every endeavor for the same reason.

According to Mark Tencaten, several businesses are starting to accept and make use of cryptocurrencies and, more broadly, digital assets. The potential advantages of cryptocurrencies are starting to become more apparent to both consumers and service providers. Therefore, businesses should consider embracing crypto and investigating its applicability to their industry. Administrators should also be ready to present a convincing argument and well-supported suggestions for a suitable course of action.